November 2016 Edition Vol.11, Issue 11

CVS Policy Reversal Offers Temporary Relief for Dispensing Practices

By Lynne Lederman, PhD

In what may be only a temporary victory for the Community Oncology Alliance (COA) and other oncology advocacy organizations, the decision by the pharmacy benefit manager (PBM) CVS Caremark to restrict patient access to in-office dispensing (IOD) of oral cancer drugs1 has been reversed.2 As of October 28, 2016, CVS Caremark will not classify physician dispensing as out of network for Medicare Part D beneficiaries “at this time, pending future dialog with CMS (Centers for Medicare and Medicaid Services).”2

Since we last addressed in-office dispensing of oral oncolytics,3 the number of approved and pipeline oral anticancer drugs has continued to increase.4 Here we review the advantages for both patients and providers that in-office dispensing (IOD) offers, as well as barriers to IOD, including some perspective on what might be next.

Barriers to IOD

According to a case study commissioned by the COA5 the CVS Caremark decision was based on a “new interpretation” of existing Medicare Part D regulations.

The case study concludes that if the exclusion is allowed to go forward, the cost of treating patients relying on Medicare (the demographic of many patients with cancer) will increase, competition will be limited, and the retail and specialty pharmacies owned by CVS Caremark will be the beneficiaries. If other PBMs follow CVS Caremark’s lead, the impact could be disastrous, given that only five PBMs control network access for over 80% of individuals in the United States.5

COA is actively involved in issues affecting IOD. Nicolas C. Ferreyros, Director of Communications, COA, said that there are 521 oncology practices nationally that COA knows of that have in-house physician dispensing, and 351 practices that have retail pharmacies within them, so 60% of oncology practices would have been affected by the CVS Caremark plans.

COA had submitted an appeal to CVS Caremark to delay or cancel their proposed action, and had subsequent discussions with them on this issue. Mr. Ferreyros said, “Our appeals have stated that if CVS Caremark does not reverse its position, or the January 1, 2017 implementation date is not postponed, COA, on behalf of patients and the community oncology providers it represents, would have no choice but to take affirmative action to prevent CVS Caremark from implementing the change. This could include, but is not limited to, pursuing legal, legislative, and regulatory remedies.”

Mr. Ferreyros said that COA was hopeful that the decision to allow oncologists who dispense medications to remain in the CVS Caremark Medicare Part D networks “will be officially communicated to all patients who have been unnecessarily shocked and worried over this ill-conceived proposal and the poor way in which it was rolled out and communicated to cancer patients and others.” He noted that COA and its Community Oncology Pharmacy Association (COPA) will continue to monitor and provide more updates on this “averted patient crisis.”
Nancy Egerton, PharmD, BCOP, Manager, Pharmacy Services, New York Oncology Hematology, Albany, New York, said the CVS Caremark plan was “a huge issue looming for us, and specifically in states like New York, and a handful of other states, where physician practices are not able to own a retail pharmacy. Unfortunately, if this went through the impact to cancer patients and to community cancer practices would have been significant.”

She said that patients in her practice had received letters from their Medicare Part D plans telling them they would no longer be able to get their medications at her practice as of January 1, 2017.

She said, “This was obviously very, very distressing to patients who already have enough issues, and they received these letters from a big PBM and they were very confused. A lot of these patients are elderly. It created havoc; it is very unfortunate. We understand what their agenda is. It makes sense, but it is very disruptive, and unfortunately the patients are stuck in the middle.”

Dr. Egerton said her practice was sending letters to their patients to notify them of the reversal. “We wanted to thank our patients as many of them made phone calls to legislators and their insurance companies about the issue. Patients who have come in to our IOD and clinic over the past few days are also being informed of the reversal. Needless to say, they are very relieved to hear the news and are happy they can continue to receive their medications at the practice without any disruption to their care.”

Robin Zon, MD, Michiana Hematology Oncology, Mishwaka, Indiana, said that her practice feels that the CVS Caremark reversal of action has made all their patients very happy. This sense of relief has been shared by many patients over the past few days since the announcement.

Clearly there is benefit to having the patients being able to receive their medication at their doctor’s institution, including immediate access to the drug, being able to start the treatment in a timely manner comfortable for the patient, and the perception of security with the doctor’s office dispensing educating, and following them.

The use of mail order specialty pharmacies means the prescribing physician may not know when the patient receives and starts taking the medication, so side effect management and dose adjustments become more difficult.

Another major barrier to IOD is that insurance plans usually determine where patients can use their pharmacy benefits. Some insurers own their own specialty pharmacies or partner with a PBM that owns a specialty pharmacy. This leads to the exclusion of IOD. According to Neil Nebughr, Director, Pharmaceutical Services, Utah Cancer Specialists, Salt Lake City, Utah, “It’s not based on cost or service, but on how that plan can make more money.”

There is also a concern that PBMs will be less likely to honor copay cards, provide access to patient assistance programs, or split fill prescriptions, increasing drug waste, and increasing healthcare costs in general.

Dr. Zon said that when payers manage cancer medications and require patients to use specific mail order specialty pharmacies, and when PBMs place oral cancer drugs into cost sharing tiers with variable copays for patients, more of the cost burden is shifted to the patient. This has resulted in patients not taking their medication as prescribed, and likely jeopardizing the effectiveness of the treatment.

The abandonment rate of newly initiated oral cancer medications is 10%.6 When the cost sharing for patients is greater than $500, patients are four times as likely to abandon their prescriptions than if the cost is $100 or less.6

Another study found that only 68% of Medicare beneficiaries with chronic myeloid leukemia initiated tyrosine kinase inhibitor therapy within 6 months of diagnosis; out-of-pocket costs and lack of cost-sharing subsidies were identified as a barrier to timely initiation of therapy.7

Patients and Practices Benefit with IOD

In-house dispensing is allowed in all states except Illinois, Minnesota, Texas, and Wyoming,8 and provides many benefits for patients. According to Dr. Zon, these benefits include ease of access to their medication.

“I think there’s a peace of mind factor for patients as well. If we are able to prescribe and dispense out of our office they are able to start the prescription right away so there is no delay,” she said.

Requiring patients to receive their medications from an outside vendor has resulted in delays of several weeks between sending the prescription and the patient starting the medication.

“Another benefit is that we provide care management and continuity for our patients as part of our oral dispensing,” she added.

This means that a dose adjustment can be accommodated immediately, resulting in continuity of therapy and less medication waste. Dr. Zon’s practice provides patient education and follow-up for any issues patients have, such as side effects. The practice also works with patients to reduce the cost of medication by using copay cards and patient assistance programs.

Mr. Nebughr agrees that a major benefit of IOD is knowing that patients are actually taking their medication when it is prescribed. His practice brings patients back after they have had their medication for 3 to 5 days to reinforce the initial physician education which is easier to do when the medications are dispensed in-house.

Dr. Egerton says in addition to advantages of IOD like providing continuity of care, they can take care of prior authorization and immediately enroll patients for financial assistance, a necessity for patients with Medicare Part D plans who typically have very large out-of-pocket expenses for oral oncolytics.9

Staff members who operate IOD programs have real-time access to all of the same clinical information that the prescribers do, including the electronic health record, physician’s progress notes, real-time laboratory values, as well as direct access to both the prescriber and the patient.

Joshua Cox, PharmD, BCPS, Director of Pharmacy, Dayton Physicians Network, Kettering, Ohio, said that access leads to a far more efficient and clinically relevant interaction with the prescriber and the patient, which his practice believes leads to higher quality outcomes and a higher value.

He notes that for some medications and indications they are able to dispense a smaller quantity when a physician anticipates there may be a dosage change. This can reduce cost if they have enough patients on that drug to ensure using the remaining inventory. “We are able to do that,” he said. “When you are dealing with an outside pharmacy that can lead to gaps in therapy sometimes if you are dispensing small quantities.”

Dr. Cox said that his pharmacy, like those of other practices, has been accredited by the Accreditation Commission for Health Care (ACHC). COPA has partnered with ACHC to create a new body of standards that are more rigorous and specific to oncology.

“Both sets of accreditation standards demonstrate that office-based dispensing programs and office-based retail pharmacies are able to meet the rigorous quality and value standards as set by nationally recognized accrediting bodies,” he said.

The National Community Oncology Dispensing Association, Inc. (NCODA) is another organization that provides quality standards for its member community oncology practices, with a focus on the improvement of oral cancer therapy.10 Mr. Nebughr says his practice has the NCODA quality standards in place. One positive quality intervention his practice has implemented is to use the electronic medical records and diagnosis codes to determine if any new drugs might be beneficial for patients, and have identified a few instances where a change to a newer drug was determined to be appropriate.

Overcoming the Barriers

We will have to wait to see if CVS Caremark exclusion of physician dispensing is off the table permanently or temporarily, and if COA and other advocates can be successful in continuing to block this action.

Jim Schwartz, RPh, Executive Director, Pharmacy Operations, Texas Oncology Pharmacy, Dallas, Texas, and President, NCODA, said, “I don’t think Caremark will go away, I think they are going to look at other means of doing some of these same things. I can’t say they will be back on this particular issue or not, I can’t say, but they are aggressively pursuing more business for their pharmacy services and that’s understandable, in the area of oncology, and I don’t think it’s in the best interest of patients.”

Christine Cramer, Senior Director, Corporate Communications, CVS Health, said that they had made an inquiry to CMS earlier this year which led to the determination that “CMS considers physician dispensing facilities that do not have a pharmacy license to be ‘out-of-network’ providers. While we received confirmation from CMS on our interpretation of the rule related to the role of physician dispensers, based on ongoing dialogue with oncologists as well as CMS, we will not be making this network change. Thus, oncologists who dispense medications will remain in our Medicare Part D networks pending future dialogue with CMS.”

Mr. Schwartz pointed out that CMS can’t make a decision unilaterally with one PBM. He believes that CMS will have to announce a meeting allowing all stakeholders to participate in deciding on the interpretation of the language in CMS regulations.

CVS Caremark’s reversal is only temporary, Mr. Schwartz believes. “For right now they are not going to do it, but their verbiage leaves it open for them to revisit this issue, and I am sure they will do something else, in some other way in the future.”

Michael-ReffAccording to Michael Reff, RPh, MBA, Manager, The Patient Rx Center, Hematology/Oncology Associates of Central New York, Syracuse, New York, NCODA supported COA’s activity in fighting the CVS Caremark restriction. He agreed with Mr. Schwartz that the reversal was only a pause, and that CVS Caremark and other PBMs are figuring out their next moves. “With physician dispensers CVS Caremark can’t retain that opportunity to dispense those medications. That is one reason I think that CVS Caremark would want to revisit this.”

Mr. Reff also believes that other PBMs are waiting to see what will happen, although they might have been ready to act themselves, and the CVS Caremark reversal made them pause as well.

Some solutions have been proposed should PBMs try to limit IOD in the future, although they are not likely to be of use for many practices.

Dr. Cox suggested a practice could close its physician dispensing program and convert to a fully licensed retail pharmacy. He acknowledges that is not an option for many practices because the infrastructure costs associated with changing that licensure are very significant.

“Many smaller or medium sized practices simply can’t afford or justify the overhead that would be required to do so for the volume of patients they currently serve,” Dr. Cox said. Patients could be encouraged to understand how their insurance plan affects their choices, so they could switch during the next open enrollment.

Mr. Reff noted that navigators in his practice were helping patients look at their plans, and that some had already changed, and now were faced with considering whether to change back. He said, “It’s disruptive to Medicare patients, older individuals who have a lot going on, and they just got a terrible diagnosis. They probably have a lot of other health issues they are dealing with, and you do this. It is unfortunate. It’s hard enough changing insurance once a year let alone twice in three weeks.”

However, if CVS Caremark and other PBMs find a way to exclude IOD, many patients may not be left with much choice. Mr. Schwartz observed, “CVS Caremark is testing the waters. NCODA and COPA by themselves are probably not going to make a difference unless there is legal support. It’s going to take the medical oncologists, the oncology community, to step up and say that this is restricting our rights to quality care we want. Many states have any willing provider statutes, so in effect they really have no right to do this.”

Mr. Schwartz, whose practice dispenses through its pharmacy and would not have been affected, concluded, “I am working with NCODA and everybody else because CVS Caremark is aggressive, and this is going to come back to us some other way. We are trying to help people stop this any way we can.”



  1. Community Oncology Alliance. Pharmacy benefit managers improperly reinterpret Medicare rules for financial gain.
  2. CVS Caremark fax.
  3. Lederman L. Can practices successfully dispense oral anti-cancer agents in-house? OBRgreen. October 2012 v6 issue 6.
  4. Shelly S. Oral therapies in the oncology marketplace. Growth potential, challenges, and trade-offs. eye for pharma. Executive Briefing. 2014.
  5. Frier Levitt. Pharmacy benefit managers’ attack on physician dispensing and impact on patient care: Case study of CVS Caremark’s efforts to restrict access to cancer care.
  6. Streeter SB, Schwartzberg L, Husain N, et al. Patient and plan characteristics affecting abandonment of oral oncolytic prescriptions. J Oncol Pract. 2011;7:46s-51s.
  7. Winn AN, Keating NL, Dusetzina SB. Factors associated with tyrosine kinase inhibitor initiation and adherence among Medicare beneficiaries with chronic myeloid leukemia. J Clin Oncol. 2016. Published ahead of print on October 3, 2016, doi: 10.1200/JCO.2016.67.4184.
  8. Community Oncology Pharmacy Association. State laws.
  9. Egerton NJ. In-office dispensing of oral oncolytics: a continuity of care and cost mitigation model for cancer patients. Am J Manag Care. 2016;22(4 Suppl):S99-S103.
  10. National Quality Dispensing Organizations. Quality standards.

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